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An eight-week revival plan announced last week, which is also being billed as the finance minister P Chidambaram's five-point revival strategy, has a ring of deja vu to it, and is at best a lame attempt to enthuse investors and prop up falling stock market indices. Most of these "fast-track reforms" had been announced as big-ticket policy initiatives in early January, perhaps for similar reasons — to shore up investor confidence and keep at bay a downgrade by credit rating agencies.

The recent spate of announcements to revive the economy amplifies the government's desperation to send out a message to the external world that "all is well". While some of the developments like the falling rupee can be partly attributed to global market sentiments, the government's attempts to put its own house in order are still far from yielding results.

Decisions to simplify and bring in clarity in foreign direct investments (FDI) are aimed at pacifying investors post the Vodafone decision, says Bibek Debroy, economist and professor at the Centre for Policy Research. (Although the Supreme Court ruled in favour of Vodafone against the Indian revenue authorities' attempts to tax a sale of shares in an overseas transaction involving transfer of shares in the Indian affiliate, laws were amended retrospectively to tax such deals.)

India Inc is wondering what the fuss is all about. Says HDFC chairman Deepak Parekh: "They should just go ahead and do it. Now is the time to go in for automatic approvals; the moment you apply to the government you are struck." Addressing reporters last week Chidambaram had said: "A wicket or a six is expected in every ball in an ODI [one day international]; economic reforms don't work that way."

Agrees Subir Gokarn, a former deputy governor of the Reserve Bank of India, now director at Brookings India, a policy-research and analysis firm: "The announcements made recently will not change investor perception immediately as these are long-term structural issues. We will need a package of some steps to address the crisis, and structural decisions."

Lack of Consensus

The FM's revival strategy includes setting up of regulators in the coal and road sector, an independent tariff regulatory body for railways, fixing a gas pricing formula, overhauling the FDI regime and pushing sale of government equity in some companies where it has a marginal stake like Hindustan Zinc and Balco. All these are aimed at boosting investments, in particular in the energy sector that has been sputtering and stalling at every juncture.

Unfortunately, none of these decisions can result in immediate change. Debroy says: "Fact of the matter is that these have nothing to do with land issues or environmental clearances [which are the biggest roadblocks]. Wasn't the CCI [Cabinet Committee on Investments] set up to look into issues holding up investments in large projects?" he asks.

The government has now set up another monitoring cell in the cabinet secretariat over and above the CCI to oversee large projects. The clutter of repeated pronouncements and the inability to execute them show up a weakness in leadership, primarily that of the prime minister, Manmohan Singh, to convince his cabinet colleagues to action the decisions. Says Parekh: "There is no direction, with different ministries pulling in different directions."

Will The FM's latest burst of announcements be different? After all, this time around he did say that he has got the PM's nod to push through these decisions in a time-bound manner. This shows that the PM, the highest authority in the executive, has now "stepped in", says Bhanu Murthy of National Institute of Public Finance and Policy.

But the chaos in decision-making and lack of consensus persist. Take the case of gas pricing. The government, prodded by producers and investors like ONGC, British Petroleum and Reliance Industries Ltd (RIL) among others, began discussions on how gas would be priced from here on, as the benchmark price set in 2007 would cease to apply in 2014.

The petroleum ministry, the parent in this case, failed to take a call and referred the matter to a special panel of ministers headed by defence minister AK Antony. The result after several rounds of meetings was yet another referral, this time to a new committee under C Rangarajan, chairman of the Prime Minister's Economic Advisory Council. Three months after the report by the Rangarajan committee, the government is still compiling differing views from related ministries even as the cabinet notes gather volume.

There were at least three formulas in the fray, at last count, all to set the price of gas for the next three years. The government is trying to take all views into account, but the decision should have been taken by now, says Murthy. "The Rangarajan report is at least three months old but the petroleum ministry is unable to freeze it as it is threatened by fellow parliamentarians on how higher prices would boost RIL's profits," Parekh says.

Road Blocks and More

The issue of a coal regulator and auctioning of coal blocks is even worse. The proposal to have a coal regulator in place was taken in May 2012 by a group of ministers headed by Chidambaram, then home minister. The proposal (chalked out several years ago) was dusted out from the files, marked immediate priority soon after the irregularities in coal auctions came out in the open. But decisions could not be taken because Coal India and the ministries raised objections at every stage. Pooling of coal prices that was proposed by a committee headed by Pulok Chatterji, principal secretary to the PM, could not be pushed through in the Cabinet due to differing views.

The setting up of a coal regulator is an imperative to allow the government to begin auctioning coal blocks. The previous system of allocating coal blocks on nomination basis cannot be continued given the large irregularities that have shown up. Import of coal, a temporary solution suggested by policymakers, has yet to get the green signal from the coal ministry and states that would have to buy power at higher rates, as imported coal is more expensive.

The policy uncertainty in the road sector, a crucial block in the infrastructure sector, has forced several road developers to put their projects on the block or stall orders placed for construction. The finance minister has advised state-run banks to reschedule repayment of loans in an attempt to help stranded investors, Debroy says.

Blaming coalition partners — a favourite defence of the UPA government — is no longer an excuse as Congress leaders now man most ministries after the withdrawal of allies Trinamool and the DMK from the government. The issue appears more critical now because it shows how the party is not falling in line with the executive, a senior banker ET spoke to said.

One example: former railway minister Dinesh Trivedi, based on the recommendations of a report by Sam Pitroda, mentioned the need for an independent tariff regulator for Indian Railways. Then, another Congress minister Pawan Bansal, till recently in charge of railways, again highlighted the matter as a key action area even before he presented the rail budget. Five months down the line, it is one of the action areas that have been included in the eight-week programme.

Turning Point?

Perhaps the only hope in the FM's latest revival plan is that toughest decisions are taken in the hardest times. Describing the current crisis as one such moment, Parekh says that the government has no option but to act now; he hopes to see tough decisions taken in the coming weeks. Adds Murthy: "You can say it should have come earlier but the PM's hand can make the difference now."

An insider in the prime minister's office (PMO) says it is now time for announcements to translate into action. He points to one important turning point — the assertion by Congress president Sonia Gandhi on May 22, at the fourth anniversary of UPA-II, that Singh is in command and the Congress party is in line with the government.

"The prime minister is carrying out his responsibility with great dignity in the face of unrelenting hostility and abuse from the opposition. We respect him and stand by him," Gandhi had said. Adds the PMO official: "The change now is perceptible and it will become evident in the weeks to come as the PM takes charge to push through reforms." Should you be holding your breath?